In this post, we will explain the difference between IFRS EU and IFRS international and IFRS UK. These are three different sets of accounting standards that companies may use to prepare their financial statements.
IFRS international refers to the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). These are a set of global standards that aim to enhance the comparability and transparency of financial information across different jurisdictions. IFRS international is used by more than 140 countries around the world, including Canada, Australia, Japan, and India.
IFRS EU refers to the IFRS as adopted by the European Union (EU). These are the same as IFRS international, except that the EU goes through an endorsement process before adopting a new or amended standard. This means that there may be a delay of up to six months between the issuance of a standard by the IASB and its adoption by the EU. In some cases, the EU may also modify or reject a standard if it does not meet certain criteria. For example, the EU did not endorse IFRS 9 Financial Instruments until 2016, while it was issued by the IASB in 2014.
IFRS UK refers to the IFRS as adopted by the United Kingdom (UK). These are the same as IFRS EU until 31 December 2020, when the UK formally left the EU and its regulatory framework. From 1 January 2021, the UK has its own independent endorsement process for adopting new or amended standards. This means that there may be differences between IFRS UK and IFRS EU in the future, depending on how the UK Endorsement Board (UKEB) evaluates and approves each standard. For example, the UK has already endorsed two amendments that were not yet endorsed by the EU as of January 2021: Interest Rate Benchmark Reform—Phase 2 and Extension of the Temporary Exemption from Applying IFRS 9.
The main implication of these differences is that companies need to check which set of standards they are required or allowed to use depending on their jurisdiction and market. For instance, UK companies that list on a UK regulated market must use IFRS UK for accounting periods beginning on or after 1 January 2021, while UK companies that list on an EEA regulated market may need to use both IFRS UK and IFRS international to comply with the reporting requirements of each jurisdiction. Similarly, EEA companies that have a presence in the UK may need to use both IFRS EU and IFRS UK for their respective financial statements.
We hope this blog post has clarified some of the differences between IFRS EU and IFRS international and IFRS UK. If you have any questions or comments, please feel free to contact us.